Patent applications are booming, but many seem to be of low quality and/or strategically manipulated to hide the real invention within a myriad of claims. This delays the patent-granting process and hinders the system's ultimate goal of balancing incentives for knowledge creation with knowledge dissemination. Here are some ideas on how to fix the problem.

For the European patent office, the year 2006 was marked by a new record in the number of patent filings, which was well above 200,000 applications: a 150% increase since 1995 (cf. figure on European filings). Concomitant to this boom in the number of filings is the constant increase in the average size of patent applications. For instance, Archontopoulos et al. (2006) show that every year patent applications at the EPO are enlarged on average by two additional claims. The number of pages per patent follows a similar trend. This evolution puts major patent offices around the world under such a heavy workload that huge backlogs are being formed with increased delay in the granting process, hence a longer uncertainty on the market.

Burn out symptoms…

A worrying aspect of this trend is that it seems to be associated with a significant drop in the quality of applications, as witnessed by several factors.

Data source : EPO

First, anecdotal evidence on increased numbers of low-quality patent is flourishing [cf. Jaffe and Lerner (2004) and Guellec and van Pottelsberghe (2007) for examples of very low quality patents filed at the USPTO and at the EPO, respectively]. Second, global R&D expenses have increased at a much slower pace over the past twenty years (R&D intensity within the OECD area has slightly grown), suggesting that a larger number of patents is filed for a given invention, or that the propensity to file an application for lower-quality inventions has increased. Third, van Pottelsberghe and van Zeebroeck (2008) provide a first empirical evidence of a substantial downward trend in the potential value of the patents granted by the EPO. The authors show that the scope-year index, based the average number of country-year of protection within the European patent convention has constantly decreased since 1985 (cfr. Figure on the scope-year index).

The Scope-Year index, 1980-1995

Source: van Pottelsberghe and van Zeebroeck (2008).

Diagnostic: new strategies

This boom in both the number and size of patent filings is due to several factors, including emerging technological fields (e.g., nanotechnologies, biotechnologies), new actors (e.g., China, India) and new types of institutions who entered the patent arena (e.g., universities, and SMEs).

These factors may actually induce more patent filings, but may not be taken as the cause of a quality drop. The main reason underlying the increase in both the number and the size in patent filing, and the drop in their average quality, is most probably related to the new filing strategies adopted by firms. Harhoff (2006) provide evidence on new ‘constructionism’ strategies (firms merge several patents to file a single application, or increasingly file divisional applications, which consist in splitting a patent into several smaller subsequent patents). Stevnsborg and van Pottelsberghe (2007) list a vast number of filing strategies (including drafting styles and filing routes) that firms increasingly use when prosecuting their patent at the EPO. The authors put forward a typology of these filing strategies that range from ‘fast track and fair’ to ‘slow track and abusive’ behaviours.

The ultimate effect of these ‘new’ behaviours is to delay the granting process and/or hide the real invention within a myriad of claims and pages: in other words a more intense uncertainty is held for a longer period of time).

The following figure, from Lazaridis and van Pottelsberghe (2007), illustrates one dimension of the effect of larger patents. It clearly shows that smaller patents have a much smaller probability to induce a communication between the examiner and the applicant (from an average of 11 claims per patent, two additional claims lead to an additional communication). The authors show that each additional communication in turn leads to a delay of about one year in the grant process. That is, applicants who file excessively large applications deliberately induce a substantial delay in the granting process. Van Zeebroeck (2007) further shows that several filing strategies not only delay the granting process but extend the entire life of a patent as well.

The impact of the number of claims on the grant process

Source: Lazaridis and van Pottelsberghe (2007).

Temporary cure vs lifelong vaccine?

Such evolution does not fit the objective of a patent system. Keeping in mind that it was created to stimulate innovation – the effective use and diffusion of an invention – having a patent system that induces the granting of ‘obvious’ inventions, with very low inventive steps, would rather induce legal and economic uncertainty. It would simply make it easier to protect existing product and more difficult to avoid imitation by firms who would easily ‘invent around’. The current patent system was certainly not designed for operating in such a world of booming applications and huge backlogs.

What is at stake is the ability of the patent system to continue fulfilling its mission in Europe, i.e. encouraging innovation and the diffusion of technology. While the mission has not changed, the context is different, hence the constraints faced by the system and the means through which it can operate.

Patent offices have reacted at different speed and with different strategies. The USPTO has for instance intensified its recruitment of examiners (1,193 new examiners in 2006 and another 1,200 in 2007) and has started a new project that consists in opening the identification of prior art to third parties (hence improving the novelty test). The EPO has further engaged into a “raising the bar” strategy.

Conclusion

A direct response to such an evolution is indeed to strengthen the selection process, in order to ensure that patents are granted only for high quality inventions and that bad or low quality applications enter the patent system as little as possible. In Guellec and van Pottelsberghe (2007) the following steps, amongst others, are suggested:

Make it easier for examiners to refuse/reject patent applications (e.g. reducing the paperwork and lengthy correspondence), for instance through the suppression of the implicit presumption of validity associated with all patent filings;

Reduce the possibility for the applicants to modify applications once they are filed, as such a tactic is often used to delay the process (divisionals could be allowed only once for instance, as opposed to the numerous generations of divisionals currently observed);

Increase incentives for applicants to file high quality applications – clear enough, not too long etc. This could be done by adapting the fee schedule (steep increase with the length of the application) or establishing sanctions (e.g. immediate refusal) for bad applications;

Open the examination process to external contributions, notably in areas where much of the prior art is widespread in the public instead of patent data bases. There is an ongoing experience in the US in the area of software that should be carefully observed;

Diffuse among the public the tools used by the EPO to access prior art, so that competitors (especially SMEs) could track more efficiently the ocean of existing prior art, and when relevant could oppose patent applications that relate to their own patented technologies;

Jaffe, A. and Lerner, J. (2004) Innovation and its discontents – How our broken patent system is endangering innovation and progress, and what to do about it, Princeton University Press, Princeton and Oxford, p. 236

van Pottelsberghe de la Potterie, B. and N. van Zeebroeck (2008), 'A brief history of space and time: the scope-year index as a patent value indicator based on families and renewals', Scientometrics, 75(2), forthcoming.